Budget Deal Averts Payment Cuts

The AAFP again is calling on Congress to repeal the sustainable growth rate (SGR) formula after lawmakers approved a one-year extension of the Medicare physician payment rate on Jan. 1 that averts a 26.5 percent reduction in the Medicare physician fee schedule.

"Today's temporary patch to the Medicare physician payment is a reprieve for elderly and disabled patients whose health care security is jeopardized by continual threats to Medicare physician payment," said AAFP Board Chair Glen Stream, M.D., M.B.I., of Spokane, Wash., in a prepared statement. "This is a welcome relief, but it is not the solution. The current system, with its deeply flawed sustainable growth rate formula, generates an annual, semiannual, sometimes monthly crisis of confidence among elderly and disabled Medicare patients and their physicians."

The Medicare payment extension, which was passed as part of a larger budget deal between Congress and the White House, prevents a 26.5 percent reduction in the Medicare physician payment rate that was scheduled to take effect on Jan. 1 as a result of the SGR. It also delays for two months implementation of the Budget Control Act's (BCA's) sequestration provision, which calls for a 2 percent cut in the Medicare physician payment rate and an additional 8 percent cut in discretionary funding for vital medical education programs. The sequestration cuts were scheduled to take effect on Jan. 2.

"Now is the time for Congress to follow through on previous promises and commit to permanently end the ordeal of temporary patches that ultimately drive up the cost of a meaningful solution and destabilize the Medicare system," said Stream. "Congress must make good use of these 12 months to repeal the SGR and put a sustainable payment system in place that helps rebalance the primary care physician workforce."

Stream said it also is important to find a permanent solution to the sequestration cuts called for by the BCA.

"The sequestration's 2 percent cut in Medicare physician payment undercuts the positive impact of the 12-month patch to the sustainable growth rate," said Stream. "Such a cut perpetuates the cycle of instability that elderly and disabled Americans have suffered for more than 10 years."

If enacted, the sequestration cuts also would reduce funding for health professions grants, the National Health Service Corps, graduate medical education and other primary care programs, which would pose a serious threat to the future production of primary care physicians, according to Stream.

"Congress has opened a path to assure the health security of elderly and disabled Americans by temporarily averting the more than 26 percent cut in Medicare payment for health services and delaying sequestration cuts," noted Stream.

"The AAFP calls on the 113th Congress to pass legislation that ensures Americans' future access to high-quality health care through a permanent solution to Medicare physician payment and through restoration of adequate funding for programs that produce the primary care physicians Americans need," Stream said.